The U.S. Food and Drug Administration (FDA) has reached a $1 million civil money penalty settlement with Globus Medical Inc., of Audubon, Pa., for the distribution of unapproved medical devices.

The settlement requires Globus Medical to pay a $550,000 penalty and David C. Paul, the firm’s CEO, to pay a $450,000 penalty, for a total of $1 million.

During an inspection of Globus Medical in September 2010, FDA investigators learned that the company had marketed its NuBone Osteoinductive Bone Graft product without proper premarket approval or clearance, as required by law.

“The device-clearance process assures the quality and safety of devices before they reach the market. Firms can’t simply choose to sell devices that FDA has found are not safe and effective,” said Steve Silverman, director of the Office of Compliance in the FDA’s Center for Devices and Radiological Health. “We took action against Globus Medical to protect patients and we are pleased with the outcome.”

Globus Medical had sought clearance of its NuBone product in January 2009, but the FDA declined to clear the product after determining that it was not substantially equivalent (NSE) to legally marketed products. The FDA advised Globus Medical that it could not distribute the product, but the firm continued to do so, even after receiving the NSE letter in December 2009.

The FDA then filed a complaint for civil money penalties against Globus Medical and the company’s CEO for distributing the NuBone product without proper FDA approval or clearance. The agency informed Globus Medical and Paul of this action in November 2011, and later participated in settlement discussions leading to the $1 million penalty agreement.

“This company ignored previous warnings by the FDA and continued to produce and distribute unapproved medical devices,” said Dara A. Corrigan, associate commissioner for regulatory affairs. “By taking this enforcement action, the FDA is demonstrating its commitment to protecting the public from the dangers of unapproved devices.”

No patient safety issues reported regarding NuBone, according to Globus. Company officials also stressed that the settlement does not allege any intentional wrongdoing by Globus Medical or Paul.

The company's side of the story is that it had considered NuBone to be minimally manipulated tissue exempt from premarket notification, but in March 2008 the FDA’s Tissue Reference Group determined that NuBone required 510(k) clearance. Globus and FDA maintained an ongoing dialogue regarding NuBone’s regulatory status including two 510(k) submissions with substantial animal data. During that time Globus exec say they communicated regularly with the agency regarding NuBone and throughout NuBone’s lifecycle believed that it was acting in a manner that was acceptable to FDA.

Despite its history of safe use, Globus decided to discontinue NuBone in 2010.

“Globus strives to conduct our business in a manner that is consistent with the highest legal standards in our industry. In this particular situation, there was an unfortunate miscommunication between Globus and FDA such that we believed we were acting in a manner that was acceptable to FDA," Paul said in a prepared statement. "We accept full responsibility and are pleased to have resolved this matter without further legal action, and look forward to a continuation of our long standing relationship with FDA, based on cooperation and mutual respect."